A win in lottery games such as Powerball and Mega Millions can make you a multi-millionaire overnight. Just for records, the jackpot amount in 2016 Powerball was a staggering 1.586 billion. This was the highest ever recorded. Even if you consider the lower end, lottery jackpots can easily fetch you around a couple of hundred millions.
So, what to do with all these mountains of cash that you get when you win a lottery? Well, life definitely changes after a lottery win. However, it’s not always for the better. There have been several cases where lottery winners were found to have squandered all their fortunes. Cases of lottery winners getting duped with dubious investment plans have also been seen.
In essence, winning a lottery may seem like the best thing to have in life. But in reality, it also brings its own set of challenges. For a better experience, here are some things you need to do when you win a lottery.
Don’t rush to claim the prize money – If your income is in 5-6 figures, winning a multi-million lottery can be emotionally overwhelming. First, you need to let the feeling sink in and prepare yourself mentally. It’s usually not easy for the ordinary folks to handle such vast sums of money. Most lottery organizers allow up to 6 months of time or more to claim your prize. So, don’t be in a hurry to claim the prize. Only when you have finalized plans about what you are going to do with the money should you claim the prize.
Keep the ticket safe – When you know you have won, your lottery ticket will become the most precious thing in your life. So, try to protect it in the best possible way. You can make copies and store digitally as well, just in case you end up losing the original. Also, it would be better to sign the back of the lottery. Till the time you claim the prize, you can keep the ticket in the safe or a bank vault.
Try to remain anonymous – If you go public with your win, it can create unnecessary hassles. People of all sorts may start contacting you for business ventures and investment options. You might also have to deal with friends and relatives, whom you haven’t been in touch for years. So, try to keep a low profile. Some states allow the winner to remain anonymous. If that option is available, you should definitely choose it.
Lump sum or annual payout – When you win a lottery, you can either choose a onetime payout or go for annual payment option. The latter is usually spread over a period of 20 to 30 years. Each has its pros and cons. So read and analyze in detail before you sign the agreement. Depending on their specific needs, some people choose lump sum whereas others go for annual payout.
Hire professionals to manage your money – Unless you are a financial whizz yourself, you will need to hire professionals who can guide you towards the right tax saving schemes and investment options. You can verify past records of such professionals to ensure that you are dealing with the right guys.
Pay off your debts – If you have mortgage or other loans, you should clear all of them. This will ensure that you can start life completely debt free.
Save for your retirement – You can put a part of the lottery money in retirement account so that you don’t have to stress it out in your old age.
Avoid splurging – Try to maintain the same type of lifestyle as earlier. Money can buy you fancy stuff, but it cannot guarantee peace and satisfaction. Also, use only the part that is available as income. Do not spend the principle amount, as you could soon lose all your fortune.
Last but not least, donate some of the money to charitable organizations. The universe has benefitted you and you can return the favor by donating to recognized charitable organizations. This gesture can also help you save tax.